(Part 2) Direct Selling: Pros and Cons

It seems like more and more people are getting into direct selling. The stigma that they are all pyramid schemes is slowly falling by the wayside as people discover there are real benefits to working in the industry. In this post, I discuss what I perceive to be the pros and cons of the direct selling world. I don’t work as an Independent Rep in the direct selling industry (nor does it fit with my lifelong ambitions), so consider this my independent assessment of the opportunity.

Pros

Flexibility. You can choose when and where you work. I know stay-at-home moms, teachers, nurses, and retirees who use this to supplement their income. I even know a single mom who was able to completely replace her full-time income and now she gets to see her son on and off the bus every day. It can be a great opportunity for someone who needs extra money but doesn’t have consistent time for a typical part-time job.

You are your own boss. You can set your own goals and don’t have to sit through another grueling performance review because you didn’t adequately navigate corporate politics. Direct selling is a low-risk way to test the waters of entrepreneurship, but with the added benefit of having resources to develop sales tools and take care of the manufacturing and distribution.

It can be lucrative. If you treat it like a small business and are able to be successful, it can be lucrative. A statistic often quoted in the industry is that 6% of women make over $100k annually, and 80% of them work in direct sales.

No education or experience required. Success in this industry is based on effort level, not education or experience criteria. This makes it a good opportunity for someone looking to pay for their schooling or someone who is self-motivated but isn’t at a good point in life to pursue a degree.

It’s a form of buying local. I consider this a pro for the salesperson and the consumer. Even if the company isn’t local, 30-50% of the sale is going to the salesperson (and back into the community). It is unlikely that products purchased at retail stores generate that kind of income for people in your local community.

Cons

Sales is a hard job. Very hard. That is why it’s a lucrative position in any industry. You need to be comfortable asking people to buy things, you need good product knowledge, and you need to be highly self-motivated… and that is just want it takes to pitch the sale. You also need to be comfortable with rejection. People will say no and sometimes they’ll be condescending about your new venture; that can be hard to take.

You are tied to the company. In the corporate world, it’s easier to transfer your skills to a different company or department. In this kind of position, you are tied to the company unless you’re willing to start over with a different brand. This won’t matter too much if you pick a good company that has a low risk of failure or scandal (like the recent Herbalife scandal), but it’s still a possibility.

You are your own boss. It’s can sound glamorous and fun, until you realize it’s not quite as stable and predictable as a steady paycheck. You’ll need to be good at budgeting for the ups and downs of the sales cycles and you’ll need to figure out your own taxes.

Overall, I think direct selling is a good business opportunity – especially for someone who needs extra cash but doesn’t have consistent availability for a part-time job. It is also great for the younger generation that wants flexibility and work/life balance that a lot of corporations can’t guarantee. Some days, I dream about a job where I work a few hours at home in the morning, hit a 10am yoga class, run some errands, and go back home to finish work (but then I remember it doesn’t fit my skills and interests, which is important to consider when evaluating if this type of work is for you).

If it’s such a good opportunity, why do so many people fail? They underestimate the self-motivation and hard work required to be successful, or they don’t have the necessary sales skills and don’t know how to get those skills. It takes a high level of personal commitment to stick with it for the first few months, when there might be a lot of leads generated but not a lot of money made. Even if someone is able to stick it out, they might not have the ability to close the sales. If this is the case, they need a mentor, self-awareness, and some really good sales books to help them shape those skills. It isn’t impossible to become good at sales; it just takes some confidence and self-awareness to develop the skills if they aren’t natural to a person.

Have you considered direct selling? What is your opinion of the pros and/or cons?

2 responses to “(Part 2) Direct Selling: Pros and Cons”

These are great Pros and Cons! Something that direct sales companies do well is make you feel like you are going to make something out of nothing immediately, and that just isn’t true. It IS a lot of effort, and finding new ways to network/sell to people outside of the bubble of people you “know”.
I especially love the part about buying local- that is a very refreshing, positive way to look at it! Thanks for part 2, Anna :)